Gold Hits Rs 1.59 Lakh But Indians Are Choosing Loans Over Selling Their Gold

Gold has always held a special place in Indian homes. It is bought for weddings, saved for the future and often passed from one generation to the next. For many families, it is also a form of financial security.

That security is now worth more than ever. Gold prices have climbed sharply, with 24 carat gold in Hyderabad also touching around Rs 1.54 lakh per 10 grams on Wednesday, while the national capital saw 99.9 per cent purity gold at Rs 1,59,800 per 10 grams. Yet Indians are not rushing to sell. Instead, many are holding on to their gold and borrowing money against it.

India is estimated to have around 30,000 tonnes of gold in households, with its value now estimated at about $5 trillion. Much of this gold sits in homes, bank lockers and temples.

This brings up another important part of the story: gold recycling. When people sell old or unwanted jewellery, the metal can be melted and used to make new jewellery or other gold products. This allows gold already inside India to return to the market instead of relying entirely on imports.

But high prices have not triggered a major rush to sell. The World Gold Council has noted that record prices have hurt jewellery demand while pushing investors towards bars, coins and other forms of investment gold. In the first quarter of 2026, Indian jewellery demand fell 19% year on year to 66.1 tonnes, even as spending on gold remained high because prices had surged.

For many families, the reason for holding gold goes beyond money. Jewellery may have been given by a mother, bought for a wedding or inherited from grandparents. Selling it can mean giving up something with both financial and emotional value.

There is also another way to unlock that value without selling it: gold loans.

The idea is simple. A person pledges gold jewellery with a bank or finance company. The gold acts as security, and the lender provides a loan against its value. Once the borrower repays the loan, the jewellery is returned.

This market is growing rapidly. Outstanding gold loans in India reached about Rs 5.1 lakh crore by May 31, 2026, rising 105.5% from a year earlier, according to RBI data. Gold loans also accounted for nearly 28% of the increase in personal loans between May 2025 and May 2026.

The rise shows a clear shift in how Indians use their gold. Families are increasingly unlocking the value of gold without giving up ownership of it.